Time to end the great railway rip-off

We must take back our railways from the greedy hands of the privileged few and return them to their rightful owners, argues Ken Livingstone.

THIS week, ridiculous fare rises to customers on our railways joined the ongoing issues with Southern Rail as what must become yet further nails in the coffin of the failed experiment that has been the privatisation of our railways.

These increases mean that rail fares are going up by 2.3 per cent on average in 2017, so passengers will feel a squeeze on their pockets at a time of an approaching cost of living crisis.

At the same time, more ticket offices are closing, guards are being removed, driver-only operations are being extended and there are fewer staff at stations to provide help, with private profit being put before passenger safety.

These are the latest in a series of examples that illustrate just what a bad deal for taxpayers the privatisation of the railways has turned out to be.

Our railway network is now the most expensive in Europe — tickets here cost up to six times more than in Europe — meaning that both taxpayers and passengers get a bad deal.

In the past six years, regulated rail fares have gone up 25 per cent, while average weekly earnings have grown by 12 per cent.

More than 200,000 people have quit a job because of excessive rail fares and another 77,000 are considering doing the same.

In London, national government ministers control the level of regulated fares, which have risen by a quarter since 2010. This increase is way above inflation and the average growth in earnings.

And for years under Tory Mayor Boris Johnson, passengers endured, even before these latest national fare rises, many years of above-inflation rises in other transport costs. Under Boris, Transport for London (TfL) fares rose by more than 42 per cent, making them the most expensive in Europe.

But, showing the difference a Labour administration can make to the cost of living, after many years of steep price rises Mayor Sadiq Khan has frozen fares on TfL services and rightly called on ministers to follow suit with national rail fares too.

Khan is also right to argue for TfL to be given control of commuter rail routes in London, including Southern, Southeastern and South West.

As he puts it: “For services taken over before 2020, this would mean that passengers could take advantage of my four-year freeze on TfL fares.

In addition, they would also benefit from an increase in the capacity, frequency and reliability of their service.”

This had looked likely to happen but just before the Autumn Statement, Transport Minister Chris Grayling ripped up the government pledge to do so, with it then coming out in the media that he had previously opposed rail devolution because he wanted to keep commuter rail services “out of the clutches of a future Labour mayor.”

A YouGov poll recorded that 52 per cent of Londoners opposed this decision, just as polling consistently suggests the majority of the population would like to see our railways nationally returned to the public sector.

Considering the litany of failures we have witnessed on the privatised railways, it is simply incredible that the government is now proposing that the publicly owned Network Rail share its responsibility for running the tracks with the same private train operating companies that are failing customers.

Network Rail has had full responsibility for running and developing the network since it was formed in 2002 after a series of fatal accidents, such as at Hatfield and Potters Bar, hit its predecessor, Railtrack.

Unite the Union’s Hugh Roberts responded angrily to the government proposal, saying: “Politicians, such as Chris Grayling, have short memories and have conveniently forgotten the Hatfield rail crash in October 2000 when four people were killed and more than 70 injured which happened under the aegis of privately owned Railtrack,” adding that, “since Network Rail took over the infrastructure and maintenance of the rail system, safety has greatly improved.”

Transport is something which should be run as a public service for everyone’s benefit and the evidence backs up the idea that a return to the public sector would be better for our railways.

Just a few years ago East Coast — having failed drastically in private train operators’ hands — was run more successfully, more efficiently and with higher passenger satisfaction levels as a public service.

It also returned record amounts of money back to the government. The central point that needs making again and again in this argument is that it is inherently wasteful to run these services on a privatised basis.

The nature of the privatising companies is that a significant proportion of the profits of their activities has to be paid in dividends to shareholders rather than reinvested in the railway service. This is money wasted. A publicly owned company would be obliged to reinvest any revenues back into the transport system.

In contrast to this, currently while passengers pay more for the rail services, the dividends paid to rail company shareholders was £222 million in 2014/15 — an increase of 21 per cent on the previous year.

As shadow transport secretary Andy McDonald put it with regards to the government’s aforementioned proposal: “Private companies are only likely to have concern for our infrastructure for their period of commercial interest, but our railways require long-term investment and strategic thinking.”

The failure of our privatised railways doesn’t only mean a “#railripoff,” (as Labour’s highly effective campaigning put it this week) for millions of passengers but is also extremely economically harmful, including for London as a vital international economic hub, as we seek to face the enormous economic challenges in the period ahead.

A Labour government is committed to taking the railways back into public ownership as franchises expire, delivering better run transport and an end to our rip-off railways, with estimates that regulated fares could decrease by up to 10 per cent. Then the rail network could be more rationally run in the public sector, with affordable fares for all and long term investment, benefitting passengers, staff and the economy.